P&G kisses up to the boss: consumers

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At procter & Gamble Co.'s Iams headquarters in downtown Dayton, a receptionist asks a yellow Labrador "What happens if you eat Purina?" The dog plays dead.

Be they two- or four-legged, consulting consumers is a top priority for P&G, particularly last month when the company marked its first annual "Consumer is Boss" event. Initially conceived as a single day on April 23, the date of introduction for a product soundly rejected by consumers-New Coke-P&G extended the festivities to a week since the anniversary fell on a Saturday.

The event, which encompassed P&G's sprawling Cincinnati campus and all other offices globally, kicked off late last month in the courtyard of P&G headquarters, and attracted two of four candidates for mayor of Cincinnati. One is David Pepper, the son of former P&G CEO John Pepper. The other, Justin Jeffre, a 32-year-old member of former boy band 98 Degrees who hopes to parlay the race into a career-reviving reality show, brought his own camera crew to the P&G event.

The idea behind the week is to come up with new ways to please this most demanding boss with products and marketing methods that don't involve so much mass media-or at least that use mass media differently. "We need new models that initially co-exist with mass marketing and eventually succeed it," said Chairman-CEO A.G. Lafley, who made "Consumer Is Boss" a mantra five years ago.

Mr. Lafley asked last November for 40 ideas to test as new, more consumer-friendly marketing models. He got more than 100, and they came from everywhere. P&G's largest agency holding company, Publicis Groupe, was involved in 40 to 50 of the test pitches, said Vaughan Emsley, general manager of the P&G business at the agency.

But they are also coming directly from the boss. In response to a contest inviting consumers to suggest better ideas for hawking the next flavor of Crest, one of the millions who responded, a 7-year-old girl, came up with the idea of having consumers vote for the next flavor, said Matt Barresi, associate marketing director for Crest. And it's doing just that as part of Consumer is Boss Week, breaking the first in a flight of 12 TV ads directing consumers to a Web site where they'll select between lemon, berry and tropical fruit flavors to extend Crest Whitening Expressions.

Driving the business with new flavors may seem humbling for researchers and marketers housed in P&G's sprawling billion-dollar Health Care Research Center outside Cincinnati, but it appears to be what consumers want. "Whitening Expressions has been the biggest thing for Crest in 20 years," said Mr. Barresi. Besides, better flavors get people to brush longer, he said. Not to be outdone, Colgate-Palmolive Co. followed Crest's cinnamon and vanilla mint flavors with its own by only a few months.

"People really are getting into this," said Jim Stengel, P&G's Global Marketing Officer. "The ideas are coming from around the world."

Though he's not revealing details yet, Mr. Stengel said the November ideas included uses of broadband, event marketing, shopper marketing, entertainment marketing, and more. "The top three or four will get corporate seed money and extra visibility," he said. "But we fully expect for every one [of the 100] to move on from here."

He acknowledges that TV will continue to be important for P&G in the U.S. for the foreseeable future and that "there are still plenty of markets, such as Latin America, where TV is king, where you still have a few channels that people watch for hours a day. ... But even there we need to change, to test new ways of using TV."

P&G executives appear earnest in driving home the consumer empowerment theme. Mr. Lafley personally mans the P&G consumer call center once a quarter for give-and-take with real-live consumers.

He requires all 50 senior managers to spend time once a quarter with consumers in homes or in shop-alongs. To make a point about walking in consumers' shoes, Mr. Stengel and global research chief Kim Dedecker swapped shoes for a video message to P&Gers about Consumer Is Boss festivities. Later, they headed out together for a home visit in Cincinnati.

The Iams employees celebrated by listening in at the consumer call center, holding an adopt-a-thon for pets from a nearby shelter and doing volunteer work cleaning pet toys and walking dogs.

At Iams the employee is also the boss-a whopping 85% own pets, more than 10 points above the national average. Don Byrd, Iams marketing director, proudly pulls a coupon out of his wallet to show he's adopted the culture, which has long included employees handing out coupons to friends and acquaintances as they talk up products.


What Iams calls "emos," the pet owners most emotionally involved with their pets, drive most of the superpremium brand's sales and new-product ideas. Walls of the Dayton offices are covered with pet pictures sent by customers. Those emos have driven Iams to a current P&G record with 61 consecutive months of dollar-share growth dating to-but lapping several times-its expansion beyond pet specialty stores to mass retail in 2000.

Part of the credit goes to promotions, such as 100-plus pet shows to help build buzz among breeders and shelters. This is coupled with an infusion of advertising from the roster shop P&G brought in- Saatchi & Saatchi-which roughly quintupled the brand's previous media spending.

It's also due to listening to the consumer.

After seeing consumers supplementing dry pet food with some form of treat-particularly to induce older pets with dental problems to eat it-Iams did quantitative research showing 40% of owners use such methods. So, earlier this year, the brand launched Savory Sauce, a more convenient and nutritious alternative to table scraps.

But while Bowser and his owner may be happy, not everyone is keen on Consumer Is Boss Week. One person not celebrating is P&G alum Sergio Zyman, the marketer behind New Coke, who nonetheless went on to a renowned career as CMO of Coca-Cola Co. before launching his Zyman Group consultancy, which he recently sold a majority stake in to MDC Partners for $64 million. He declined, through a spokesman, to comment on P&G celebrating his mistake. "That's not something he's been jumping up and down to talk about," the spokesman said, "for various reasons."

What do all those shoppers tell P&G?

P&G spends big on consumer research every year and gets a great deal of feedback from consumers. Aside from the insight about tastes and behavior, it allows the company to determine just how many people are squeezing the Charmin.

Nearly 70% of primary grocery shoppers are women.

P&G spends more than $100 million annually on consumer research.

P&G got more than 3.5 million consumer contacts in 2004 via its e-mail and phone center, up from 1,000 letters in 1940 and 800,000 calls when toll-free lines opened in 1974.

P&G was the first consumer-products company to print toll-free numbers on its packages.

P&G’s consumer-contact volume is up 75% in only the past five years, driven largely by the addition of Clairol, which in itself accounts for about 1 million calls and e-mails annually.

P&G contacts another 1 million consumers annually through its outbound research efforts.

More than 50 million households in North America squeeze--or otherwise come into contact with--the Charmin every day.

People eat 275 million Pringles every day. The chips’ curved shape inspired the design of the Olympic stadium in Sydney, Australia.

Tide does more than 32 million loads of laundry globally each day.

Consumers buy enough Bounty towels each year to soak up more than 3 million Olympic-size pools.

P&G conducts roughly 10,000 formal consumer research projects each year.

Crest.com set a P&G record for hits to a brand Web site in a day with 3 million following the appearance of Crest Vanilla Mint on "Apprentice 2" in September.

Each of P&G’s top 50 managers is required at least once a quarter to visit with consumers, either in their homes or on a shopping trip.

Source: P&G

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